House and Senate plans for appropriations bills for 2014 are currently about $91 billion apart, setting the stage for a possible government shutdown in October.
Appropriations subcommittees in the House and Senate have released “302(b) suballocations” that break down levels for discretionary spending in 12 categories, including defense, agriculture and transportation.
The Budget Control Act of 2011 caps 2014 discretionary spending on defense items at $498 billion and non-defense items at $469 billion. The House appropriations bill allocations meet the overall sequester limit of $967 billion, but exceed the defense spending limit by $28 billion at the cost of non-defense programs. The Senate allocations are set above sequester levels for both defense and non-defense programs.
Discretionary spending makes up just over a third of the federal budget, the rest of which is primarily social insurance, including Social Security and Medicaid. If congressional appropriations exceed the sequester-level discretionary limits established in the Budget Control Act, it will trigger another round of automatic sequester cuts divided equally between defense and non-defense items.
Congress could choose to overturn sequestration by passing new legislation on the overall trajectory of government spending and taxes. The large difference between House and Senate 302(b) allocations, however, suggests that a likely short-term scenario is a fight over a large continuing resolution to fund the government and a possible government shutdown at the end of the fiscal year this fall.